Spa Management

How to Avoid Compensation Mistakes in Your Spa

1.Energize employees by getting them excited about their work, build team spirit, and provide a friendly working environment. Hire people with commitment (avoid part time when possible). 2.Consider a trial period before hiring full-time to avoid costly mistakes 3.Limit the use of Independent contractors. They are a liability because they cannot be managed or trained. Employ them primarily for ancillary services like laser hair removal, nutritional consultations, etc. 4.Define basic job responsibilities--Compensation is not only treatment-based, it is based on...

Strategies to Improve Spa Profitability

Get Comfortable with Business Generally, spa owners and managers must overcome business phobias. Unlike resort spa directors who must be comfortable with "crunching numbers", day spa owners are often poor financial managers. Spa owners often abdicate their finances to accountants who review financial statements, most times performing a "post mortem" on last month's records. Make Re-booking a Priority "Rescheduling drives everything; retained customers will account for 80% of your business's worth, but most often represent only 20% of your clientele,"...

Challenges to Spa Profitability

Ease of entry into the spa industry Increasing competition from the medical, hospitality, beauty, and fitness industries Inherited beauty industry traditions Extensive use of independent contractors (booth rental tradition) Out of control compensation costs that create ever-increasing losses Low margins; Similar to restaurants, spas have traditionally low margins (2% to 7% return on investment is common, vary rarely higher than 15%) Poor retailing skills and high commissions on retail 10% commissions in the spa industry versus 2% to 3% commissions...

Sample Table of Contents for a Day Spa Business Plan

1.0 SITUATION ANALYSIS 1.1 BUSINESS DESCRIPTION 1.2 OBJECTIVES 1.3 DEVELOPMENT BUDGET 1.4 COMPLETION SCHEDULE 2.0 AREA DESCRIPTION 2.1 LOCATION 2.2 POPULATION 3.0 PROGRAM FORMAT 3.1 TOUCH THERAPY 3.2 HYDROTHERAPY/ AROMATHERAPY 3.3 SKINCARE & SPA TREATMENTS 3.4 RELAXATION THERAPIES 3.5 CLIENT EVALUATION & EDUCATION 3.6 RETAIL SALES 4.0 MARKETING PLAN 4.1 ENVIRONMENTAL OVERVIEW 4.2 TARGET MARKETS 4.3 COMPETETIVE ANALYSIS 4.4 MARKETING COMMUNICATIONS 5.0 HUMAN RESOURCE STRATEGY 5.1 STAFFING PLAN 5.2 JOB DESCRIPTIONS 5.3 EMPLOYEE INCENTIVE PLAN 6.0 DEVELOPMENT STRATEGY 6.1 RECEPTION...

3 Tips to Prepare for a Spa Opening

Work in a local day spa before you open your own property. It is a great way to "dip your toe in the water before getting wet". You can see if you like the people and the day-to-day day spa environment. Attend some trade shows such as The International Spa Association Convention ( www.ispaconference.com ). That will give you a good overview of the industry, and allow you to network with other day spa owners. Understand that, to be profitable,...

Spa Start-Up Challenges

The key risks of a spa business are: 1. Not finding sufficient labor for your venture (highly skilled therapists down to spa attendants are in demand) 2. Running into cash flow problems 3. Not having any "demand generators" such as foot traffic or "curb appeal" as they call it; or having a nearby hotel, fitness center, or beauty salon, shopping, etc. That said, you should also look at the regional and local characteristics of your particluar spa project. Each location...

Spa Management Metrics

Return on investment in a spa depends on many factors, inlcuding: What kind of spa (day spa, resort spa, etc.) How well-managed the operation is The amount of debt service That said, a typical rule of thumb is that the more the spent on the build-out, the longer the amount of time before break-even is reached. So a small day spa may take a year to stabilize, whereas a large resort spa may take 3+ years. A healthy return in...

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